Children's Hospitals Are Being Fined Unequally for Readmissions

A new study finds that pay-for-performance (P4P) measures might penalize hospitals treating children from deprived or ethnically backward minorities in an unequal way, due to factors beyond their control.

Researchers at the University of Colorado (Aurora, USA), the Children’s Hospital Association (Overland Park, KS, USA), and other institutions conducted a retrospective cohort study of 43 free-standing children’s hospitals within the Pediatric Health Information System database to determine whether risk adjustment for commonly available social determinants of health (SDH) affects the readmissions-based P4P penalty status of children’s hospitals in the United States.

The researchers examined hospital discharges from 2013 that met criteria for potentially preventable readmissions, and evaluated two risk-adjustment models. The first was a baseline model adjusted for severity of illness. The second was an SDH-enhanced model that adjusted for severity of illness and a set of four variables that included race, ethnicity, payer, and the median household income for the patient’s home zip code. The main outcome was the change in a hospital’s potentially preventable readmissions penalty status.

Data from 179,400 hospital discharges at the 43 hospitals showed that SDH variables were distributed per 39.2% nonwhite, 17.9% Hispanic, and 58.7% publicly insured; median household income for the patient’s home zip code was USD 40,674. When compared with the baseline model, adjustment for SDH resulted in a change in penalty status for three hospitals within the 15-day readmission window, and five hospitals within the 30-day window. The study was published on February 15, 2016, in JAMA Pediatrics.

“Studies like ours show that patients who are poorer or are minorities are readmitted at higher rates than other patients,” said lead author Marion Sills, MD, of the University of Colorado, “which raises concern that the readmissions penalties punish hospitals for the type of patients that they serve, rather than purely for the quality of care they provide.”

Medicare (Baltimore, MD, USA) launched the penalty program in 2012 in an attempt to combat a perverse financial incentive, wherein hospitals earned more money if patients were readmitted to health deterioration after they are discharged, because they can be paid for two stays instead of one. In 2013 Medicare levied fines of USD 227 million against 2,225 hospitals that had their payments reduced by up to 2% the following year.

Related Links:
University of Colorado
Children’s Hospital Association
Medicare